Political Entrepreneurs

The Economic Engine of Political Change

Category: Status Quo

Pure Protectionism, Texas Style

June 8th, 2015 by Edward Lopez

Three basic questions motivate our building the  framework of political change in Madmen.  Why does politics generate wasteful and unjust policies? Why do such failed policies persist even when superior alternatives are known and  available? Why do certain failed policies get replaced with other ideas? While most of this blog focuses on question 3, it’s always helpful to come back to the first two questions, both of which are answered by traditional public choice theory (1 by…
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Better Living Through Political Entrepreneurship

June 27th, 2013 by Edward Lopez

Today I discovered a book the old fashioned way: while browsing the stacks at a brick-and-mortar library . Published in 2010, Better Living Through Economics is a collection of essays that documents the impact of basic economic research on improving public policies. The collection is edited by John J. Siegfried, who is Professor of Economics at Vanderbilt University and the Secretary-Treasurer of the American Economic Association. All the contributors to the volume are top economists in the profession. Better Living has a…
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Reforming the NCAA on Player Compensation

January 7th, 2013 by Edward Lopez

Tonight — at last — Notre Dame and Alabama take the field to decide this year’s college football champion. An estimated 36 million viewers will tune in, and both schools will receive paychecks of $18 million. The winning team promises to have its assistant coaches descended upon with lucrative job offers. Alabama’s Nick Saban is already college football’s highest paid coach, at an annual salary of $5.5 million . And Notre Dame’s head coach, Brian Kelly, is already fending off rumors that…
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Calling Political Entrepreneurs: San Francisco Ride-Share Edition

December 12th, 2012 by Edward Lopez

Like many cities, San Francisco limits the supply of taxi cabs and town cars. This keeps cabbies out of the red, but it creates shortages along the way. As with any shortage, entrepreneurial folks tend to find ways around. At Radical Social Entrepreneurs, Jeff Fong (my former student) draws attention to the emergence of ride-sharing start-ups Ride-sharing start-ups Lyft , SideCar and Tickengo are helping San Franciscans get around faster and cheaper than ever before…much to the chagrin of local cabs. But…
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The Heisman Memorial Trophy is Undergoing Political Change

November 24th, 2012 by Edward Lopez

Still two weeks remain before the winner of the Heisman Memorial Trophy is announced (explained below). Each year, about 900 members of the media and former Heisman winners cast ballots for their top three picks. Awarded since 1935 to the best player in college football, the Heisman traditionally has gone to upperclassmen, usually running backs or quarterbacks. Only three sophomores have ever won, the first in 2007. And no freshman has ever won, with just…
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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7)

The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7)

[W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7)

While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6)

Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6)

Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6)

They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6)

If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5)

When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5)

It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5)

In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.

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